Lantheus Holdings is the IBD Stock Of The Day as LNTH stock consolidates following a monstrous run-up that began in February.
The company makes tools for imaging diagnostics. In May 2021, Lantheus won Food and Drug Administration approval for its newest growth driver, Pylarify. Pylarify is an injectable agent that helps highlight prostate cancer under a PET scan.
More than 3 million men in the U.S. have prostate cancer today, Chief Executive Mary Anne Heino said during the UBS Global Healthcare Conference in May. Every year, doctors diagnose about 270,000 new cases. Of those, 35,000 will die from prostate cancer.
"This has been an incredibly exciting launch and an incredibly exciting partnership, I would say, with the prostate cancer community," she said, noting the company is about a year into its launch.
LNTH Stock: An Alternative In Cancer
Pylarify works by targeting PSMA, an antigen that appears on the surface of prostate cancer cells. It can find tumors 4 to 8 millimeters in size. On its website, the company says this leads to higher detection rates.
Typically, prostate cancer is identified by heightened levels of another antigen known as prostate specific antigen, or PSA. But Lantheus says Pylarify works even in men who have low PSA levels. This paid off in the first quarter, as Pylarify generated nearly $93 million in sales.
"We believe there is a significant opportunity in PSMA PET imaging and Pylarify, our first to market, best-in-class imaging agent, has us well-positioned to capitalize on the opportunity and, more importantly, to help physicians find, fight and follow disease to deliver better patient outcomes," the company said in an emailed statement to Investor's Business Daily.
Pylarify helped overall sales rocket almost 126% to $208.9 million, well above LNTH stock analysts' forecast for $165.3 million. Adjusted earnings snagged growth in quadruple digits, hitting 97 cents a share. Analysts projected roughly half that at 46 cents per share.
Estimates remain promising for the current quarter, even with a tough year-over-year comparison looming for Pylarify. According to FactSet, analysts expect Lantheus to earn 70 cents per share on $202 million in sales. Earnings would grow by triple-digit percentages and sales would double.
Diagnosing Heart Conditions
But Pylarify isn't Lantheus' only strong product. The company also sells Definity, a similar agent for heart imaging and ultrasounds. Definity can be used in echocardiograms, an imaging method used to diagnose heart conditions.
During the first quarter, Definity brought in $58.3 million in sales, accounting for the lion's share of the company's precision diagnostics revenue. Definity sales grew 4.2% year over year as other products in the same division saw declines.
For the year, Lantheus now expects $800 million to $835 million in sales and profit of $2.90-$3.15 per share. That's currently in line with LNTH stock analysts' estimates for $824.4 million and $3.03 a share, respectively.
Highly Rated LNTH Stock
The next earnings report could give LNTH stock another chance to fly. Shares are now consolidating after running up 121% since late February. Shares rocketed 39% on Feb. 28 alone, after the company posted its fourth-quarter earnings.
When a new base forms, savvy investors could also look for an early entry off the 50-day moving average. According to MarketSmith.com, shares are now trading in line with that key indicator.
Bullishly, LNTH stock has a strong Composite Rating of 98 out of a best-possible 99, according to IBD Digital. This puts shares in the top 2% of all stocks in terms of fundamental and technical measures.
Shares also have a perfect Relative Strength Rating of 99, meaning LNTH stock is in the top 1% of all stocks in terms of 12-month performance.
LNTH stock edged up a fraction to close at 64.21 on the stock market today.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
